Section 158BB

Section 158BB — the law in short

What the courts have decided on section 158BB, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• Kamal Nayan Singh v DCIT High CourtHelps taxpayerNo later treatment found
  I filed my section 254(2) application in 2014 when four years were allowed. The Tribunal dismissed it in 2017 applying the new six months. Can it do that?
  No, on the Jharkhand High Court's view. The Tribunal must apply the law prevailing on the date the miscellaneous application was FILED, not the law prevailing on the date it happens to hear it. An application filed before 1 June 2016, within the then four-year period, cannot be thrown out by applying the six-month period substituted by the Finance Act 2016.
• CIT v Harjeev Aggarwal High CourtCuts both ways
  The department is taxing me on what I admitted in my statement during the search. Can an addition rest on that statement alone?
  No. The Delhi High Court held that a statement recorded under section 132(4) is not itself "evidence found as a result of search" for the purposes of section 158BB(1). It is information, and it can support a block assessment only so far as it is relatable to incriminating material actually unearthed in the search. A standalone admission, with no document or asset behind it, cannot trigger a block assessment. On the facts, though, the Court found there was such material - a diary of unaccounted sales and books that did not record admittedly cash payments - so the addition of Rs.74 lakh was restored.
• Sonaj And Company v DCIT — a belated block return under the 1995 Chapter is still a valid return, and the 2024 amendment proves it ITATHelps taxpayerNo later treatment found
  The block return was filed after the time given in the section 158BC notice and the notice under section 143(2) came more than twelve months later. The department says the return was non est. Is it?
  For a search governed by the 1995 Chapter XIV-B, no. The Pune Tribunal held that there was no provision in the erstwhile section 158BC making a block return filed beyond the time specified in the notice non est, so the belated return was a valid return, the notice under section 143(2) had to issue within twelve months of the end of the month in which it was filed, and a notice issued later made the block assessment null and void. The Tribunal reached that conclusion partly BECAUSE the amended section 158BC, applicable from 1 September 2024, now says expressly that a return furnished beyond the period allowed shall not be deemed to be a return under section 139 — a provision it treated as absent from the earlier law.
• Statutory position — section 158BA(2) to (6): what abates on a search, what revives if the block order falls, and why the search year is assessed twice CBDT Circulars & InstructionsCuts both ways
  A search took place in November 2024 while my client's scrutiny assessment for an earlier year was pending. What happens to that assessment, and what happens if the block assessment is later annulled?
  The pending assessment abates. Section 158BA(2)(a) provides that any assessment, reassessment or recomputation under provisions other than Chapter XIV-B, pertaining to any assessment year falling in the block period and pending on the date of initiation of the search or the making of the requisition, shall abate and be deemed to have abated on that date. If the block proceeding or the block order is later annulled in appeal or other legal proceedings, section 158BA(5) revives the abated proceeding from the date the Principal Commissioner or Commissioner receives the order of annulment — and the revival itself ceases if the annulment is set aside.
• Statutory position — section 158BB: how the block figure is built, what is kept out of it, and why Abhisar Buildwell does not simply carry across CBDT Circulars & InstructionsCuts both ways
  The block assessment adds amounts for which nothing was found in the search. Can I take the Abhisar Buildwell point that there must be incriminating material?
  Not in the form in which that case decides it, because Abhisar Buildwell construes section 153A and section 158BB is worded differently. Section 158BB(1) makes the total undisclosed income of the block period the aggregate of only two things — what the assessee declares as undisclosed income in his section 158BC return, and what the Assessing Officer determines under section 158BB(2); and section 158BB(2) requires that determination to be made 'on the basis of evidence found as a result of search or survey or requisition of books of account or other documents and any other material or information as are either available with the Assessing Officer or come to his notice during the course of proceedings under this Chapter'.
• Statutory position — section 158BC: the sixty-day notice, the two approvals, and the traps that kill a block assessment CBDT Circulars & InstructionsCuts both ways
  My client has a section 158BC notice for a March 2025 search. How long has he got, what happens if he files late, and is there a section 153D approval to attack?
  The notice must give a period not exceeding sixty days for the block return, and that period can be extended by a further thirty days only in the narrow audit case described in the fifth proviso. If the return goes in after the period allowed, the second proviso says in terms that it 'shall not be deemed to be a return under section 139' — so a late block return is non est, with consequences that run all the way to the notice under section 143(2). There is no section 153D approval in a block assessment; the approvals are elsewhere — section 158BC(3) requires the prior approval of the Additional or Joint Commissioner or Director BEFORE the section 158BC notice is issued, and section 158BG requires the previous approval of the same rank BEFORE the assessment order is passed.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.